Why You Should Charge Your Friends for Borrowing Your Stuff

Why You Should Charge Your Friends for Borrowing Your Stuff

Kijung Shin, Euiwoong Lee, Dhivya Eswaran, Ariel D. Procaccia

Proceedings of the Twenty-Sixth International Joint Conference on Artificial Intelligence
Main track. Pages 395-401. https://doi.org/10.24963/ijcai.2017/56

We consider goods that can be shared with k-hop neighbors (i.e., the set of nodes within k hops from an owner) on a social network. We examine incentives to buy such a good by devising game-theoretic models where each node decides whether to buy the good or free ride. First, we find that social inefficiency, specifically excessive purchase of the good, occurs in Nash equilibria. Second, the social inefficiency decreases as k increases and thus a good can be shared with more nodes. Third, and most importantly, the social inefficiency can also be significantly reduced by charging free riders an access cost and paying it to owners, leading to the conclusion that organizations and system designers should impose such a cost. These findings are supported by our theoretical analysis in terms of the price of anarchy and the price of stability; and by simulations based on synthetic and real social networks.
Keywords:
Agent-based and Multi-agent Systems: Noncooperative Games
Agent-based and Multi-agent Systems: Economic paradigms, auctions and market-based systems